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TMI Blog2022 (5) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... group have restricted or enhanced the addition to the extent of 6% of such amount or disputed purchases. Therefore, taking a consistent view, the disallowance which was restricted to the extent of 5% by learned CIT(A) are increased to 6% of the impugned purchases of Rs. 2.15 Crores. Assessee appeal dismissed. - ITA No. 537/SRT/2019, C.O. No. 15/SRT/2021, ITA No. 112/SRT/2019, ITA No. 83/SRT/2019 - - - Dated:- 27-4-2022 - Shri Pawan Singh, Judicial Member And Dr. Arjun Lal Saini, Accountant Member For the Department : Shri H.P. Meena, CIT-DR For the Assessee : Shri Sapnesh Sheth, CA ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. This set of three appeals out of which one appeal by Revenue and Cross Objection (CO) therein by assessee for assessment year 2009-10 and two cross-appeals for assessment year 2010-11 are directed against the separate orders of ld. Commissioner of Income tax (Appeals)-3, Surat [ CIT(A) for short] dated 12.09.2019 12.12.2018, which in turn arise out of separate assessment orders passed by the Assessing Officer under section 143(3) r.w.s 147 of the Income Tax Act, 1961 (hereinafter referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subject, the learned Assessing Officer has erred in rejecting book resulting u/s 145(3) of the I.T. Act. 4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal: 3. Brief facts of the case are that assessee is a firm engaged in the business of manufacturing and export of diamonds. The assessee filed its return of income for the Assessment Year 2009-10 on 14/09/2009 declaring total income of Rs. 17,76,610/-. The case of the assessee was reopened on the basis of information received from DGIT (Investigation) Mumbai that a search action was carried out on Bhanwarlal Jain and his group wherein it was found that Bhanwarlal Jain group was providing accommodation entries in the garb of sale bills, purchase bills and secured loans in the name of various proprietary concerned and companies. The assessee is one of the beneficiary who had shown non-genuine transactions of Rs. 2.15 crores from Mayur Exports. Mayur Export is managed by Bhanwarlal Jain and his group. On the basis of such information, the Assessing Officer recorded reasons that income to the extent of non-genuine transaction of Rs. 2.15 crore has escape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Arvind Ghevarchand Jain and was in hand in glove with them. The assessee failed to produce the supplier and was seeking their cross examination instead of producing them. The assessing officer rejected the books of accounts under section 145(3) by taking view that the assessee failed to prove the genuineness of the purchases. The Assessing Officer completed the assessment under Section 143(3) r.w.s 147 of the Act vide order dated 23/12/2016 by making disallowance of entire purchases of Rs. 2,15,78,821/- shown from Mayur Exports. 4. On appeal before the ld. CIT(A), the assessee challenged the validity of reopening as well as additions on merit. The ld. CIT(A) after considering the submission of assessee as well as material available on record, upheld the validity of reopening by referring the decisions of the various Hon ble Courts by taking view that the assessing officer initiated the action under section 147/148 as per law. On merit, the ld. CIT(A) has restricted the addition to the extent of 5% of the amount/bogus purchases by referring various decisions of the Tribunal and decision of Jurisdictional High Court in Mayank Diamonds Pvt Ltd Vs ITO ( Tax appeal No. 200 of 2003) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogus hawala traders. 7. On the other hand, the learned AR for the assessee submits that he is not pressing the grounds of appeal related with validity of reopening in AY 2010- 11. The ld AR for the assessee submits that the profit margin in the diamond industry is very less and the disallowances restricted by the ld CIT(A) is on higher side. In alternative submission, the learned AR submits that the Assessing Officer have not disputed the sales of assessee. The Assessing Officer made disallowance only on the basis of report of investigation Wing without making any independent investigation. No finding on the documentary evidences files by assessee was given by Assessing Officer. In other alternative submission, the learned AR submits that assessee has shown gross profit of more than 3%. In case the disallowance restricted by learned CIT(A) to the extent of 5% is affirmed the assessee may be allowed relief to the extent of gross profit declared by assessee. 8. We have considered the rival submissions of both the parties and have gone through the orders of the lower authorities. We find that the Assessing Officer made disallowance of entire purchases shown from Mayur Exports. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised by the Revenue is partly allowed resultantly, the C.O. filed by the assessee is dismissed. Finally, the appeal of the revenue stands partly allowed and the C.O. of the assessee stands dismissed. 11. The assessee in its appeal for A.Y. 2010-11 in ITA No.83/SRT/2019 has raised following grounds of appeals:- 1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income-tax (Appeals) has erred in confirming the action of assessing officer in reopening assessment by issuing notice u/s 148 of the I.T. Act, 1961. 2. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in partly confirming the action of assessing officer in making addition as unverifiable purchase by sustaining addition to the extent of Rs.24,54,836/- as against addition of Rs.4,90,96,724/- made by ld. assessing officer. Rs.7,58,540/-. 3. It is therefore prayed that above addition made by assessing officer and confirmed by Commissioner of Income-tax (Appeal s) may please be deleted. 12. The revenue in its Cross appeal has raised following grounds of appeal; ..... X X X X Extracts X X X X X X X X Extracts X X X X
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